April 8, 2010
Your WestlawNext License Can Be Just Like Your Westlaw License. Part II: Downplaying the Ability to Block Out-of-Plan Resources for a Cross-Database Search Engine in WLN Marketing
During this WestlawNext roll-out, the track record for obtaining clear, precise and comprehensive information from TR Legal Marketing has left something to be desired. To quote Greg Lambert in his open letter to Lexis about learning from WestlawNext mistakes when launching "NewLexis" next year:
let everyone know exactly who you are, what you can do, and how much you are going to cost us. Don't play with phrases like "modest premium" or "we're still working on the pricing" as you enter the world.
Another way to put is, don't open product road shows with a statement that "no questions about pricing will be answered at this time" when a simple, clear and direct statement like the following can be made:
Your WestlawNext license can be structured like your Westlaw license. You can craft your plan resources like in the past, you can block access to out-of-plan resources if that's what you have done in the past and want to continue doing, or you can provide access to out-of-plan resources with charges incurred on a transactional or hourly rate basis based on your decision which pricing model to go with. Plan resources may not be strictly identical but may be comparable. Costs are subject to your plan coverage, the choices you make with respect to blocking or not blocking out-of-plan resources and which pricing model you choose if you choose to provide access to out-of-plan resources.
How hard would that have been? Of course, mentioning blocking, discussed in the first part of this series, does distract from the message that TR Legal Marketing really wanted to get out to end users, namely WestlawNext searches across all databases and isn't that a good thing. Well, it is but... .
Why Downplay Blocking from TR Legal Marketing? The author of a recent Scotia Capital investor analysis report hits the proverbial nail on the head under a section entitled "Pricing Premiums Depend on Client Negotiations with Sales Reps:"
We view the new pricing structure implemented in WestlawNext as a potential driver of additional revenue through increased content subscriptions and pay-through fees. With WestlawNext, customers no longer have to pay for each search conducted; instead users are only charged when a document is fully viewed. The potential exists for Thomson Reuters to capture additional revenue above the premium rate increases as law firms now can search across WestlawNext's entire database, populating results outside of the law firm's subscription. This is beneficial for the company's earnings as customers pay a higher rate to view documents out of their subscription jurisdiction, and a rise in content subscriptions may occur as customers become aware of databases, that are relevant to their business.
(Emphasis added.) The complete Scotia Capital report, WestlawNext Strengthens Positioning, can be purchased here. Highly recommended.
The marketing objective here is to promote WestlawNext's cross-database search engine. Exposing the user population to additional databases which if unblocked but out-of-plan over time may lead to subscribers wanting to expand their plans to reduce their variable out-of-plan costs. In these WLN "upgrade" days, that can be a very expensive proposition if negotiations are going to proceed along the lines of TR Legal's traditional 3-year license. Here's an instance where the vendor and institutional buyer have something in common. For a across-database search engine, both may want to expose end users to the entire range of of West's 40,000-odd databases to see if some will be used and, if so, how regularly. But at what expense to the subscriber?
Finding Common Ground under WLN. A common ground can be reached during this WLN "upgrade" period. While maintaining your existing Westlaw contract, a vendor like TR Legal that wants to be your "partner" could easily offer to provide WLN under an selection of plan components similar to your existing Westlaw plan for a reasonable temporay access charge with out-of-plan resources left unblocked but uncharged for a trial period of reasonable duration, one that is long enough to train users and then to evaluate their use of the cross-database search engine accessing all WLN resources. By trial period, I do not mean one month!
TR Legal could provide itemized monthly billing statements for what your costs would be based on in-plan and out-of-plan usage. At the conclusion of this trial WLN period, you could evaluate whether you want a WLN license and, if so, want to increase or decrease your selection of plan components based on usage and cost of out-of-plan resources and whether you want to block or unblock out-of-plan access under the terms of WLN pricing.
Anyone been offered a 6-9-12 month WLN trial period along these lines? If a Company is thinking long term about providing a cross-database search engine with an eventual shutdown of Westlaw and a buyer must evaluate costs at the institutional level, this wouldn't be an unreasonable way to conduct business. [JH]
I completely agree with your suggestions about how West could turn the WestlawNext rollout into a long-term revenue driver and customer relationship builder, instead of a marketing debacle. As I posted on Twitter in early February:
What @Westlaw thinks is “modest.” Frankly, I believe “upgrade” 2 WestlawNext should be free 4 current customers.
After all, @Westlaw will still make $ when customer accesses out-of-plan document from WestlawNext results list. [cont.]
Charging 4 upgrade to WestlawNext is shortsighted, b/c WLN is designed to reveal all relevant docs (incl. out-of-plan).
A WestlawNext user who frequently accesses out-of-plan docs, will convince *him/her self* to expand scope of subscription.
Late last month, I spoke to a researcher from a different investment company about my views on how WestlawNext might affect Thomson Reuters' bottom line. Though I haven't seen his report, if he gave my views any weight at all, his company won't be nearly as bullish on TR as Scotia Capital is.
-- Lisa, Isn't it interesting how many of us who blog get contacted by investment house analysts about institutional buyers reaction to West? Been there, done that with NYC and London based analysts for sometime now. The reports I've seen are less bullish on TR than Scotia Captial's but I haven't made an effort to search for enough to make a "consensus" view statement. Perhaps I should because during a break in my so-called law library career, I once traded stock. The one's I've seen tend to be "market perform." Some are more favorable toward WK and LN than TR, but that's not based on any sort of comprehensive investment house research. Joe
Posted by: Lisa Solomon | Apr 8, 2010 6:04:39 AM